COMPANY INDEBTEDNESS `2010

Trend of increasing the obligations of the nonfinancial sector of the economy continued in 2010 at the end of the year exceeded 157 bn levs and compared to 2005 are higher by 91 mlrd.levs or 2.4 times. Growth compared to year 2009 from 8945 mlrd.levs is 6%. 

This show data from the last survey of corporate indebtedness, drawn by a team of BIA, based on official financial statements of companies in the NRA and the NSI. The survey results were presented at a press conference today, January 9, 2012, with the participation of the Executive Chairman of the BIA Mr. Danev and Deputy Chairman of the BIA Kamen Kolev.

A structural distortion in the economy has not yet been overcome and obligations continue to grow as the growth rate decreased due to strong investment activity suite, study shows yet. Alarming fact is that most accounting firms are undercapitalized - the obligations of all firms at the end of 2010 are 72% larger than their own capital. 

"The big dilemma is whether to block long-term debt growth, or growth will reduce the risk of over-indebtedness," said Mr. Danev. According to him in subsequent years the production activity of enterprises will provide sufficient funds for payment of obligations. There is a danger of playing with these obligations in a weak economic growth. High debt continued undercapitalization of the enterprises and the value of assets will create pressure on the banking system, stressed Mr. Danev. 

The full text of the study and presentation of today's press conference, see attached file below.